The latest predictions from the British Chambers of Commerce (BCC) suggest that the UK economy is set to grow faster than expected.
Moving from a previous estimate of 0.5% to 0.8%, the corporate home institution is now committing to a financial increase this year.
It was previously predicted that the increase could be 0.7% in 2025, but this estimate has now been revised upwards to 1%.
This comes after the UK recorded its biggest rise in output since 2022 (0.6%), which was a stronger than expected start to the month.
UK Economy Needs Sustained Nourishment for Momentum
The BCC said that even though the scope for long-term expansion is still muted, the country's economic system may want to shift into higher gear Even though the scope for long-term expansion is still muted.
However, the BCC noted that contemporary signs point to the possibility of monetary momentum if well-supported.
"The UK economic system is alive, however it wants to be nourished if it's miles to benefit momentum, underscoring that politicians need to have long-term, sustainable monetary plans, particularly in mild of the upcoming fashionable election on July 4."
"Businesses might keep an eye on politicians to illustrate that they have long-term, feasible monetary plans. These want to strengthen enterprise self-confidence and spotlight the UK's advantages." stated Vicky Pryce, chair of the BCC's monetary advisory council.
Inflation to Slightly Increase, Approaching Bank of England’s 2% Target by 2026
The BCC has maintained its growth forecast for 2026 at 1%, despite the best estimates for 2024 and 2025. The group warned that after a robust start in 2024, the underlying momentum of the economy is expected to slow over the next two years.
Growth is forecast to accelerate to 0.4% in the second quarter, slowing to 0.3% and 0.2% in subsequent quarters.
According to the BCC, inflation will see only a limited pick-up after reaching the Bank of England's 2% target with the abandonment of the year 2026.
Also, leisure costs are expected to fall in the second half of the year, which could have an effect on business insurance and the real economy.
As a result, BCC's revised projections highlight the need for strategic plans and support measures if the recovery is to be preserved and strengthened, while expressing cautious optimism about the UK economy.